SARS’ Edward Kieswetter kissing R8 billion goodbye 

South Africa loses between R5 billion and R8 billion a year in direct taxes from the illegal import of used cars. 

This was revealed at the AutoTrader Dealer Convention, where a study from Naamsa and The Automotive Business Council revealed the extent of these ‘grey imports’. 

While South Africa outlaws the import of used vehicles, around 30,000 enter the country from Botswana, Lesotho, and Eswatini (Swaziland). 

These countries do not police the import of used cars, making them an easy gateway for dealers wanting to use African countries as dumping grounds. 

By circumventing official channels, these illegally imported used cars evade taxes and duties, leading to revenue loss for the government and unfair competition for local dealerships and manufacturers. 

Naamsa and The Automotive Business Council said that illegally imported used cars cost the fiscus between R5 billion and R8 billion a year in direct taxes. 

The influx of illegal used car imports negatively impacts local car market sales, undermines local manufacturing, technological innovation and job creation, and aids criminal activity. 

Consumers, solving for affordability, probably care little about revenue loss. But the risk of personal loss is just as real, he said. 

“Illegal used car imports are often very old and may not meet local regulations and safety standards, potentially endangering motorists and other road users”, Naamsa CEO Mikel Mabasa said. 

Buyers also face challenges in obtaining warranties, spare parts and after-sales service. 

Stemming the flow of illegal used car imports is difficult and requires the buy-in of law enforcement agencies, Transnet, and SARS. 

“We’ve already spoken to Transnet, and they’ve agreed that the vehicles being imported to neighbouring countries will now move from the Durban port to the Maputo port. So we’re actually moving them away from South Africa into Mozambique,” Mabasa said. 

Naamsa CEO Mikel Mabasa

Illicit trade flourishing in South Africa

Last year, SARS estimated that illicit trade costs the economy R100 billion annually and robs the country of valuable resources.

A report published by Business Unity South Africa (BUSA) said illicit trade is one of the biggest threats to stability and economic growth in South Africa.

It found South Africa faces challenges from illicit trade in alcohol, cigarettes, fishing, mining, counterfeit electronics, pharmaceuticals, food, and apparel.

SARS Commissioner Edward Kieswetter has previously highlighted that illicit trade costs South Africa R250 million daily.

Operations have begun to address the problems associated with illicit trade and bring the perpetrators to book.

Earlier this year, SARS’ National Customs Enforcement Team joined forces with the police and defence force to intercept truckloads of illicit cigarettes.

In June, SARS’ Customs Division began to destroy illicit and smuggled cigarettes, valued at R43 million, at the Beitbridge border post.

The illicit and smuggled cigarettes were seized in multi-agency operations and dedicated and intelligence-driven operations as part of the Customs Division’s tobacco strategy.

“This is part of ongoing efforts to enhance the effectiveness of customs in combating illicit trade, particularly in tobacco and cigarette,” SARS said.

“We will use all information gathered by enforcement agencies to follow up and prosecute those who are involved in these syndicated crimes,” Kieswetter said.

“All those who are involved, irrespective of their nationality, will face the full might of the law. We will continue to carry out our enforcement work without fear, favour or prejudice.”


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